Why Cutting Your Marketing Budget Means Suicide for Your Business

danger-of-cutting-marketing-budget

Marketing is the one thing that businesses should never consider cutting, and yet it’s the first place that most tighten their purse strings during an economic downturn. However, according to a McGraw-Hill research study, companies that increased their marketing budgets during the recession in the 1980s saw a 265 percent growth in sales. While it may seem counter-intuitive, putting more money into your marketing budget while everyone else is pulling back can do your business a world of good.

 

 

Cuts Lose Customers

Consumers are always consuming even when the economy isn’t at its best. Every cut you make results in lost opportunities for engagement with people who are looking for your products and services. Don’t convince yourself that your current customer base will sustain you through a downturn. Businesses always need new customers, especially in today’s market where long-term relationships are the key to success. Losing just one chance to connect with a prospect doesn’t only result in a single missed sale; it loses you all the money you would have made in future sales to that same customer.

Marketing Draws Attention

All marketing activities increase awareness of your brand among your target audience. Cutting your budget decreases the visibility that’s necessary to catch the attention of curious consumers and keep it long enough to make a sale. If your competitors are marketing during a downturn and you aren’t, your customers will go to them instead. Staying out of the public eye digs your company into a hole that you may not get out of even after the economic situation improves. Between lost customers and the investment that it takes to rebuild your brand, you wind up spending more money than you would if you hadn’t cut your marketing budget in the first place.

Analyze Your Approach

Chances are that missed opportunities due to sloppy marketing practices are losing you more money than a recession will. Before pulling the plug on essential marketing channels, reassess what you’re doing. Take a look at the ROI for each type of advertising and note which approaches are bringing in the most high-quality leads. Calculate how much money each one of these leads makes you initially and the potential income from the long-term relationships with those leads. How many more of these relationships can you establish by tightening up your approach?

Focus on Quality Targets

If you absolutely can’t afford to keep your marketing budget where it is, refocus your efforts so that you get the most out of the money you do put into it. Hone in on the high-quality lead generators that you identified when doing your analysis. Focus on creating quality ads and content that speak directly to these segments of the market, and diversify the way that you deliver that content. For example, your direct mail clients probably have different needs than those you connect with on social media. Make sure that the message you send to each niche is tailored to the dominant purchasing style.

Strengthen Instead of Downsizing

A slow economy is the perfect time to improve your advertising tactics. As you seek to streamline where and how you deliver your message, consider what aspects of your marketing plan could use a boost. Are you as active as you should be on social media? What methods are you using to follow up on potential leads?

Every department in your company should be contributing to your marketing efforts to ensure that all the bases are covered. With everyone working together, you can boost your brand, increase customer retention and come out of an economic downturn stronger than ever before.

Full-Logo-StackedCoastline Marketing Group specializes in internet marketing and website development. We proudly serve the Monterey, Salinas CA area. Please contact us for a free review of your current online presence and status.